Legislation (now at ITA 2007, s. 773ff.) was first introduced in 1969 to counter transactions whereby professional persons with high earnings converted their future income into a capital sum. At that time, the difference could be even more significant than now, as the highest rate of income tax was then 91.25 per cent. The relative tax cost of income and capital gains has shifted several times in the intervening years, not least because of the introduction and revision of CGT taper relief, and the subsequent announcement that the relief was to be withdrawn altogether.

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